BofA Said to Warn Equities Unit Employees of Staff Cuts
Bank of America Corp. dismissed Steven Milunovich and two other energy analysts as the lender seeks to trim expenses in its investment bank, said two people with knowledge of the moves.
Peter Christiansen and Gilbert Yang also lost jobs in the past week at the Charlotte, North Carolina-based firm, said the people, who requested anonymity because the moves are private.
Milunovich was a managing director who had worked more than two decades at investment banks including Merrill Lynch & Co., Morgan Stanley (MS) and Salomon Brothers. He was ranked No. 2 among computer hardware analysts by Institutional Investor in 2004 and first in a 2005 Wall Street Journal survey, covering firms such as Hewlett-Packard Co. (HPQ), International Business Machines Corp. (IBM) and Apple Computer Inc.
“The fact that a senior analyst of Steven’s stature was let go confirms to me that Bank of America views cost reduction as a long-term process that won’t end anytime soon, and is indicative of what’s happening on Wall Street,” Richard Lipstein, a managing director for Boyden Global Executive Search in New York, said in a phone interview. “This is also part of a trend to have fewer analysts cover more stocks.”
Wall Street firms are reducing staff and pay to align costs with lower revenue from trading and underwriting. More cuts are coming at Bank of America as part of Chief Executive Officer Brian T. Moynihan’s efficiency plan, which he said would be completed in April and may target as much as $8 billion in total annual savings.
Christiansen, who reported to Milunovich, covered alternative energy, and Yang followed oil and gas exploration and production. Remaining analysts will take over their responsibilities, one of the people said. Joseph Osha, who writes about the solar industry, will cover more clean-energy firms, and Doug Leggate, who follows oil refiners, will take over Yang’s companies, the person said.
Bank of America informed employees in equity sales, trading and research last month of reductions scheduled for mid-March. Workers were told that the dismissals were meant to free room to hire outsiders while leaving headcount almost unchanged, two people said in February.
Some chose to join competitors before the deadline. James Farrell, who traded Canadian equities, is set to work for JPMorgan Chase & Co. (JPM), and Esteban Garcia, who traded shares of telecommunications firms, will go to International Strategy & Investment Group Inc., the people said.
Lost Market Share
Employees were told last month that results were improving from the beginning of the year, one of the people said. Equities sales and trading revenue dropped 16 percent in the fourth quarter to $660 million. The global banking and markets unit, run by co-chief operating officer Thomas K. Montag, posted a $433 million loss.
Bank of America lost market share last year to rivals including New York-based Morgan Stanley in the trading of equities, bonds, currencies and commodities, Matthew O’Connor, an analyst at Deutsche Bank AG, said in a Jan. 19 research note.
Milunovich has a history of leaving Merrill Lynch only to rejoin. He departed in 2005 to start a hedge fund and returned the following year. In 2007, he became a partner at communications firm Brunswick Group LLC and went back to Merrill Lynch as an analyst in 2008, shortly before its takeover by Bank of America.
Milunovich, Christiansen and Yang didn’t return e-mail and phone messages left at their offices. Calls to residential phone numbers listed in Milunovich’s and Yang’s names weren’t answered. A woman who answered at a listing matching Christiansen’s name said it was the wrong number.
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